Tobin's q theory adds to neoclassical theory because it ________
A) illustrates the important relationship between tax rates and the incentive to labor
B) emphasizes the role played by asset price fluctuations on investment spending
C) highlights the impact of a tax increase on business investment
D) underlines the relationship between financial innovation and the financial crisis of 2007-2009
B
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The perfectly competitive firm’s short-run shutdown rule is to shut down immediately if
A. TR < TC. B. TR < SRFC. C. TR < SRVC. D. TR < MC > Q.
Which of the following factors can influence the production possibilities frontier in the future?
a. The amount of capital produced b. A fall in the rate of inflation c. A decrease in consumption in an economy d. An increase in the tax rate e. A legal reform that increases transaction costs
Using the supply and demand model, what would happen if foreign investors no longer want to loan money to the United States?
a. Interest rates will decrease, and investment will decrease. b. Interest rates will increase, and investment will increase. c. Interest rates will increase, and investment will decrease. d. Interest rates will decrease, and investment will increase.
People who report being unemployed but who, in fact, are working for "under the table" pay to avoid taxes on their earnings are really employed and therefore cause the reported unemployment rate to be higher than it would otherwise be
a. True b. False Indicate whether the statement is true or false